Tuesday, February 16, 2010

Do You Practice URT?


Call me na├»ve or not in touch with reality (though I really hope you won’t call me that), I thought I was imagining things. I was researching some materials for an academic report when a study caught my eye. It’s all about the authors’ investigation on the concept of URT in auditing.

Okay, this is for the benefit of those who don’t know, URT stands for under reporting of time. Why did I think I was imagining things? Because, although it exists, URT is not something usually discussed outside the auditing firms. And before you get on my case and say this - not usually discussing it in public – is not true, the same study quoted an audit partner saying precisely the same thing!

Personally, I’ve seen this happen. When I was a junior, we were always told to log in our ‘productive hours’. Take note, productive hours, NOT actual hours.

Productive hours? What the heck does that mean? Do these hours include our learning curve (we’re juniors, remember)? Do they include the time when we had to go for a water break or just take a five – minute break? Do they include the travel time or the time we get stuck in traffic? Do they include the time we used up waiting for the client to finish his phone conversation so that we can start asking our questions?

Believe me, I spent 8 years in an auditing firm, and never once did I get the concept of ‘productive hours’.

When I became a senior then a manager, I couldn’t care less about productive hours and audit budgetary constraints. Sure, I prepared audit budgets and budgeted auditing hours, in short I played lip service to the concept of budgets and budgeted hours. But I never followed them.

Why? Because the reality is I know my clients and I know that our audit fees will not be enough to cover our actual hours. And which will I choose? Stick within the audit fee and curtail the hours by either reducing them or reducing the audit work? Or do the audit work required and to hell with those budgets? Easy choice. Fortunately, my partners never called me on it; I guessed they’re in touch with the reality as well.

But based on what I read, it would seem that URT is really a worldwide phenomenon (the study was done in Ireland) as far as audit is concerned. And the study gave off various reasons as well (and I thought it was only because we were unproductive). Let me just list them here:

Inefficiency
Why am I not surprised that this is the first in the list? Inefficiencies can be due to a lot of factors (according to the study). It can be due to doing activities that are not related to work (Farmville, anyone?). Or maybe one spent a half hour chatting over the phone with a friend. Or you feel that you are inefficient because you are a slow learner or you are still in the bottom part of the learning curve (as a junior or a new senior or new manager, you would sometimes feel this way). Or you made a lot of mistakes and you have to do everything all over again. Whatever the reasons are, these things boil down to one thing – you have to be 100% productive during the day or else…you’re inefficient! (I guess we’re not allowed to be human beings when we’re inside an auditing firm.)

Performance Evaluation System
Uhm, I never saw this as part of my evaluation (though if I did, I would have ignored it), but evidently, this was one of the reasons given for the URT. You want to be noticed, you want to be promoted quickly, you want to reach the top in your rating system so what do you do? Stop charging so you can meet the budget! (Ugh, not good, not good at all.)

Requests
This is how the juniors (and sometimes, the seniors) learn about URT. They are ‘requested’ (explicitly or implicitly) either not to charge all their hours in a particular job or charge it in another job. And being the dutiful juniors and seniors that they are, they complied.

So those are the three reasons given. How about you, do you practice URT?

9 comments:

  1. great, thought-provoking entry. (like always). thanks emievil!!

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  2. If I am being playing an online game or watching a video I don't report my time. However if I am taking a 5 minute break during the day to clear my head or wait for the client, you can bet I charge that time!!!

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  3. great entry, emie, you are such a great writer, i love hearing all your thoughts and stuff, keep up all the good work

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  4. very true, as a junior I would like to hear whether other firms have used time charged in performance evaluations and things like whether setup time should be charged?

    I also have a lot of nonchargeable time when i'm unscheduled..i sometimes ask 1 or 2 managers(since there are lots in the office and i don't know most of them) but usually have no result..i'm concerned that this will reflect poorly on my performance evals..what are people's experience on this?

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  5. While I haven't worked in audit for a long while (since I was a co-op student) I can definitely say I did URT. Even as a student, where I had no chance of getting promoted I did it.

    I think the main reason I did it was to smooth over the differences between files. The less difference it took to complete from the year before the better. I just didn't want to raise any flags at all. My philosophy at the time was to keep my profile down so I can get out unscathed.

    Nowadays, I have no incentive to URT since where I work they don't even tell me the hours to compare to. All the better since it's one less thing to worry about.

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  6. I'm taking aim at the second-last anonymous comment - hope the advice helps you, it's optimistic, but you need to be optimistic if you're trying to score work when things get slow. Otherwise people shun your negativity and that's not good for anyone. http://www.krupo.ca/archive/2010/03/11/banishpityparties.aspx

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  7. Krupo, I read your post in the link you provided and I hope the others will read it too. I've seen some of the staff who are 'idle' while others are 'busy'. Having idle staff is a problem for the partners, managers, seniors and the scheduler to solve but at the end of everything, the staff could take the initiative to find something that he / she can do.

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  8. I, of course, a newcomer to this blog, but the author does not agree

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